I see some overheated media reports blaming Google for failing to deliver its promise: "...to reinvent mobile hardware with Motorola's new phones, and directly compete with Apple by owning both mobile hardware and software."

Just as much as I want to keep manufacturing jobs in America, I don't fault Google for this decision. The new Google-Lenovo deal shows a significant recognition by Google that the company has little to gain by hanging on to the smartphone hardware business.

Added values are in peripherals Now, contrast this decision against Google's $3.2 billion purchase of Nest.

Nest's Learning Thermostat and Protect smoke and carbon monoxide alarm are both designed to connect to one receiver: the Nest app on a smartphone.

The value here isn't the smartphone itself, but in peripherals -- the software and hardware that run Nest. The smartphone, a mere messenger for these functions, is fast becoming a commodity.

To be sure, I'm not forecasting the eclipse of the smartphone. Smartphones will still be ubiquitous for years to come, their value intact. But the smartphone's key function will be a modem, attached to a myriad of connected devices and technologies.

In short, the world is about to flip.

Gone is the conventional wisdom of cramming more and more bells and whistles into smartphones so that smartphones can morph into something else. Emerging is a new world where the existence of smartphones is a given. Added value, where new competition will unfold, is not in smartphones themselves, but in "peripherals" (some call it the Internet of Things) that will leverage the smartphone's connectivity.

Now, let's add these two events (dumping Motorola and buying Nest) to last Sunday's patent truce between Google and Samsung.

That move will "short circuit" the drawn-out legal wrangling we see today, as Francis Sideco, senior director of consumer electronics and communications technologies at IHS, told EE Times. The "eventual reality" perceived by both companies is that nobody wins hands down in any litigation. While winning some individual cases and losing some, the net loss for both sides is in time and energy, and in the vast sums squandered on lawyers, Sidesco explained.

But more to the point, the significance of the Google/Samsung cross-licensing agreement, as Ron Epstein, principal at Epicenter IP Group, put it earlier this week, is this: "The [smartphone] platform battle -- initiated by patent wars -- is coming to an end."

Clearly, both Google and Samsung are seeing the value of doing business together by trading patents.

The flip side of this détente, though, is the maturing of the smartphone business. If we were still in the early days of smartphone innovation, this wouldn't have happened.

The end of an era The end of an era for smartphones is a difficult prospect to face. After all, the smartphone market has been the engine of the electronics industry in the last several years. And yet, think about this: For a few years, other than the screen size of a handset, the industry hasn't been able to significantly improve or differentiate the smartphones on the market today.

The state of the smartphone industry today bears a striking resemblance to the moment in 2005 when the novelty of notebook computers began wearing off and IBM sold its PC business to Lenovo.

The difference now is that the PC business then was predominantly owned by Taiwanese (and some Japanese) companies. The smartphone business for the next decade will be dominated by (mainland) Chinese OEMs including Lenovo, Huawei, ZTE, and many other names still unfamiliar in the United States yet.

As many of my engineer friends in China would tell me, Lenovo has a stellar reputation for technology, quality, talent and discipline. (In contrast, from what I gather about ZTE, not so much.) Lenovo is also ambitious. Last year, it even assembled a team of engineers to start developing its own application processors for smartphones -- in order to differentiate their products.

Nobody better take lightly what Lenovo can do.

In an environment that will be marked by a declined smartphone innovation, Apple's next move -- virtually the first major initiative in the post-Steve Jobs era -- will be huge.

I think it depends on "which Lenovo", e.g. which product line, which is true of many PC makers. My Lenovo Thinkpads (a X61t and T43) have been very solid and reliable. OTOH, I don't think the consumer laptops have the same reputation

Junko "yes, the differentiator of all those new and old devices really comes down to the display. I agree."

Displays are different than the rest of the hardware. Of course, a few years ago, I couldn't have imagined wanting to spend time reading anything on a 4" diagonal screen. Unless it's the only thing available, it's kind of silly as far as I'm concerned.

I can envision a lot of use for Google Glass type devices, but I think it would be pretty distracting. Maybe the answer will come in the form of flexible, rollable and foldable thin screens - Keep it folded up in your wallet, purse, backpack or pocket an pull it out when you need a display. Maybe it could resize the image based on you much you've unfolded vs. how much is folded under.

What is important to Google is the software and "services" that they provide from the use of the hardware, because it's profitable and sustainable. HW simply is not profitable nor sustainable, othewise for example Microsoft wouldn't be selling their XBox at a lost. And Microsoft is now trying to sell their software as 'services', instead of like a 'product'.

With that said, Google still needs to be involved in some aspect of HW, that's because they must realized their new concepts, being a tech leader and product/system definer. Especially the ones in the R&D. Otherwise, it's just all tell and no show. But once a new concept is realized and takes off, they'll throw away the HW and maintain the software and "services".

jnashee wrote: Right now Google is just a confused teenager who doesn't know what it wants to be when it grows up.

IMO Google knows exactly what it is: a company that sells advertising. Lots and lots of advertising. That's how they make their money, and IMO the whole point of smart phones as far as Google is concerned is to deliver more adverts and charge more because they're "better focused". Without Android, there is no way for Google to prevent Apple and Microsoft from taking over delivery of adverts, cutting off Google's lifeblood.

Patent lawsuits are a plague on a company like Google. They distract them from working on new ways to deliver adverts. If you're a cash-rich company like Google, you can either hoard cash and wait for others to sue you, or you can spend that money up front and take patents out of circulation so others aren't using them against you. Defense is expensive, but cheaper than wars of attrition.

Many people deduced that Google bought Motorola to get a bunch of patents and the hardware really didn't matter. In fact, the idea that Google could make phones that competed with Samsung and other Android producers created a degree of concern that Google might spoil their ecosystem, as Microsoft did by coming up with its own Windows 8 hardware. Selling off the Motorola hardware puts these fears to rest.

Humans love to see patterns even where none exist but I think the conclusion the writer came to is much stretched. Most large companies in the valley have lots of cash that they use to buy up companies on an impulse and years later shut them down or sell them for a write-off. Intel, Cisco, Symantec, Google, Microsoft .... look at their acquisition history and make up your mind. I would argue the three events are barely connected. With the Motorola acquisition, I don't think Google ever intended to get into the hardware business. If they were serious about getting into smartphone hardware, why wouldn't their Motorola unit produce the Google Nexus line of phones and tablets? From day one, all they wanted was Motorola's IP (to defend against patent lawsuits) and the skunkworks division and they are keeping those after the Lenovo deal. The Samsung deal was some time in the making. Such deals don't happen overnight with all the legalese involved especially given all the suing going around Android. Nest? I will chalk it up against an impulse buy. A hardware business with low entry barrier. Already there are Nest competitors, both old and new, that are offering similar products. Give it a few years, Google will get out of Nest. Right now Google is just a confused teenager who doesn't know what it wants to be when it grows up. All they know is ads brings lots of dollars and they have lots and lots of them in the bank.

That makes a lot of sense, but at some point, if the only major component is the LTE modem, it could be stick into the watch of Glass - maybe. I can see the display as a big variable. If people like the Glass type display, then they'll likely not care to carry around a phone size display.

Those that aren't comfortable obscuring their vision might still need to carry around s poakcet display. Maybe that display, then, is just a display and an LTE modem.